Calcot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. The majority of owners of residential leasehold property in Calcot enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Calcot you must see if your lease has between 70 and 90 years remaining. There are good reasons why a Calcot flat owner with a lease having around 80 years remaining should take steps to make sure that a lease extension is effected without delay
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years left, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Calcot lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Noah owned a conversion flat in Calcot on the market with a lease of a few days over sixty years left. Noah informally contacted his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £100 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Noah to exercise his statutory right. Noah obtained expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Dr S Lee bought a one bedroom flat in Calcot in May 2002. The dilemma was if we could estimate the premium would likely be for a ninety year lease extension. Similar flats in Calcot with 100 year plus lease were in the region of £213,600. The mid-range amount of ground rent was £60 invoiced annually. The lease elapsed on 23 October 2082. Taking into account 57 years unexpired we approximated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 plus expenses.
Ms B Brooks acquired a first floor flat in Calcot in November 2011. The dilemma was if we could approximate the premium would be to prolong the lease by 90 years. Comparative homes in Calcot with 100 year plus lease were valued around £200,000. The average ground rent payable was £50 billed monthly. The lease termination date was on 5 February 2103. Taking into account 78 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.